• 7809 Airline Drive, Suite 201, Metairie, Louisiana 70003. USA
  • 504.298.DOCS

The choosing of or not choosing of a business entity should be made specific to your unique situation. The decision should be made on the business type, licensing laws, financing opportunities, governmental regulations, the owner’s educational background, and other factors. When working toward a decision, mi1Corporation Services, Inc. can refer you to accountants, attorneys, consultants, and more, so that you can make the best choice for your situation.

Comparison of Entity Characteristics

 

 

C Corporation

Partnership

Limited Liabilty Company

S Corporation

Restrictions on Eligible Owners

NO

NO

NO

YES

Liability Limitations

Limited to the amounts invested and loaned (if no ability to pierce the corporate veil)

Unlimited liability for general partners; limited partners' liability limited to the amounts invested and loaned if no participation in management.

Limited to the amounts invested and loaned; participation in management does not affect liability shield.

Limited to the amounts invested and loaned (if no ability to pierce the corporate veil)

Double Taxation

YES

NO

NO

Generally, NO

Flow-through Taxation

NO

YES

YES

YES

Ability to deduct losses against share of entity debt

N/A

Loss limitation increased by share of recourse liabilities and qualified nonrecourse liabilities

Loss limitation increased by share of recourse liabilities and qualified nonrecourse liabilities

Loss limitation increased by direct loans from shareholder only

Subject to passive activity loss rules

Generally, NO

YES

YES

YEs

Tax rates

Graduated tax rates up to 35%

Owners' marginal tax rates

Owners' marginal tax rates

Owners' marginal tax rates

Special allocations

Generally N/A

Yes, if substantial economic effect

Yes, if substantial economic effect

NO

Fiscal year restrictions

NO

YES

YES

YES

Tax-free fringe benefits to owners

Permitted

Limited

Limited

Limited

Penalty Taxes

Accumulated Earnings; Personal Holding Company

NO

NO

Built-in Gains; Excess Passive Income; LIFO Recapture

Possible Treatment as Disregarded Entity

NO

NO

YES

YES, if qualified S Corporation subsidiary

About Us

mi1Corporation Services, Inc. provides legal help with the formation of business entities such partnerships, limited liability companies, and corporations in the State of Louisiana.

 
  • 7809 Airline Drive, Suite 201, Metairie, LA 70003. USA
  • 504.298.DOCS
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